Smt. Mary Bernadette Larive, Visakhapatnam V. The Income Tax Officer, Ward-3(3), Visakhapatnam

CO 11/VIZ/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5106 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Keywords: Sale consideration of property below Jantri Value; Audit objection; Fair market value; Tax effect; Set aside; Capital Gains
• Section: 143(3); 50C; 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON'BLE ACCOUNTANT MEMBER I.T.A. NO. 687 /VIZ/2019 (ASST. YEAR : 20 09 - 1 0 ) ITO, WARD - 3(3), VISAKHAPATNAM. VS. SMT. MARY BERNADETTE LARIVE, FLAT NO.501, TIRUMALA HEIGHTS, BALAJI NAGAR, SIRIPURAM, VISAKHAPATNAM. (APPELLANT) PAN NO. AAZPL 9266 A (RESPONDENT) C.O.NO. 11/VIZ/2020 (ARISING OUT OF I.T.A. NO. 687/VIZ/2019) (ASST. YEAR : 2009 - 10 ) SMT. MARY BERNADETTE LARIVE, FLAT NO.501, TIRUMALA HEIGHTS, BALAJI NAGAR, SIRIPURAM, VISAKHAPATNAM. VS. ITO, WARD - 3(3), VISAKHAPATNAM. PAN NO. AAZPL 9266 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI, ADVOCATE. DEPARTMENT BY : SHRI B.SATYANARAYANA RAJU , SR. DR DATE OF HEARING : 08 / 02 /2021 . DATE OF PRONOUNCEMENT : 10 / 0 2 /2021 . 2 ITA NO. 687 / VIZ /2019 C.O.NO. 11/VIZ/2020 ( SMT. MARY BERNADETTE LARIVE ) O R D E R PER D.S. SUNDER SINGH , ACCOUNT ANT MEMBER THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD.CIT(A) - 1, VISAKHAPATNAM , DATED 04/10/2019 FOR THE A.Y. 20 09 - 1 0 . ITA NO. 687/VIZ/2019 2. WHEN THIS APPEAL IS TAKEN UP FOR HEARING, LD. AR HAS SUBMITTED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW THE PRESCRIBED LIMIT, THEREFORE THE APPEAL IS NOT MAINTAINABLE . HOWEVER, ON PERUSAL OF THE GROUNDS OF APPEAL, IT IS SEEN THAT THE APPEAL IS FILED BY THE DEPARTMENT ON ACCOUNT OF REVENUE AUDIT OBJECTION. 3 . FACTS OF THE CASE ARE THAT IN THIS CASE, THE ASSESSEE HAS FILED HER RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 6,75,200/ - ON 22/06/2009 AND THE ASSESSMENT WAS COMPLETED U/SEC. 143(3) R.W.S. 147 ON A TOTAL INCOME OF RS. 89,09,360/ - . IN THE ASSESSMENT, THE AO HAD ACCEPTED THE SALE CONSIDERATION AT RS. 60.00 LAKHS AND ALSO ALLOWED EXEMPTION U/SEC. 54F OF THE ACT. 4. ON THE ADDITIONS MADE IN THE ASSESSMENT ORDER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) . DURING THE PENDENCY OF APPELLATE PROCEEDINGS , THERE WAS REVENUE AUDIT 3 ITA NO. 687 / VIZ /2019 C.O.NO. 11/VIZ/2020 ( SMT. MARY BERNADETTE LARIVE ) OBJECTION IN THE ASSESSMENT ORDER DATED 22/06/2009 WITH REGARD TO APPLICATION OF DEEMED VALUE O F SALE CONSIDERATION AS PER SECTION 50C OF THE ACT AND ALLOWABILITY OF DEDUCTION U/SEC. 54F OF THE ACT. THE AO REFERRED THE ABOVE ISSUE S TO THE LD.CIT(A) DURING THE APPEAL PROCEEDINGS FOR CONSIDERATION . IN APPELLATE PROCEEDINGS, THE LD. CIT(A) EXAMINED BOTH THE ISSUES AND ALLOWED RELIEF TO THE ASSESSEE AS UNDER: - 8.3(A) ISSUE OF SALE CONSIDERATION : THE APPELLANT ADMITTED THE SALE CONSIDERATION AT RS.60,00,000. THE CAPITAL GAINS WERE ORIGINALLY ASSESSED BY ADOPTING THIS AMOUNT AS SALE CONSIDERATION. LATER, THE REVENUE AUDIT PARTY NOTICED THAT THE SRO VALUE OF THE PROPERTY WAS RS. 63, 17,000 AND THEREFORE THE ASSESSING OFFICER SUBMITTED IN THE REMAND REPORT THAT THE SRO VALUE OF THE CONSIDERATION SHOULD BE ADOPTED IN VIEW OF THE PROVISIONS OF S.50C OF THE ACT. THE APPELLANT CONTENDED THAT THE ASSESSING OFFICER DID NOT GET THE VALUATION DONE BY THE DVO FOR A SCERTAINING THE FAIR MARKET VALUE OF THE PROPERTY. IN THIS REGARD, THE APPELLANT COULD ESTABLISH THAT THE IMPUGNED PROPERTY IS INVOLVED IN DISPUTES BY SUBMITTING THE LEGAL DOCUMENTS AND A JUDGMENT COPY OF THE IV ADD! DISTRICT JUDGE, KAKINADA. FURTHER, THE DIFFERENCE BETWEEN THE DOCUMENT VALUE OF THE CONSIDERATION AND THE SRO VALUE IS - JUST AROUND 5% ONLY. THE ASSESSING OFFICER DID NOT GET THE VALUATION OF THE PROPERTY DONE BY THE DVO. THEREFORE, - TO BRING FINALITY TO THE ISSUE I DIRECT TH E ASSESSING OFFICER TO ADOPT THE SALE CONSIDERATION ADMITTED BY THE APPELLANT AT RS.60,00,000 . 8.4 ......... SUBSEQUENT TO THE ASSESSMENT, THERE APPEARS TO BE AN AUDIT BY THE REVENUE AUDIT PARTY WHEREIN APPELLANT RECEIVED 4 FLATS DURING THE RELEVANT PREVIO US YEAR FROM THE DEVELOPMENT OF THE SITE AT BANGALORE AND THEREFORE NOT ELIGIBLE FOR EXEMPTION U/S 54F OF THE ACT. THEREFORE, THE ASSESSING OFFICER SUBMITTED IN THE REMAND REPORT THAT SINCE THE APPELLANT OWNS MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF THE SITE AT KAKINADA SHE IS NOT ELIGIBLE FOR EXEMPTION OF THE CAPITAL GAINS U/S 54 F OF THE ACT.............................................. ......... ................................... ........................................................... ................................... .................. THERE ARE TOTALLY EIGHT CO - OWNERS INCLUDING THE 4 ITA NO. 687 / VIZ /2019 C.O.NO. 11/VIZ/2020 ( SMT. MARY BERNADETTE LARIVE ) APPELLANT . THE BUILDER CONSTRUCTED EIGHT FLATS WITH AN EXTENT RANGING FROM 3000 SQ.FEET TO 4700 SQ.FEET AND DELIVERED 50% OF THE BUILT UP AREA TO THE CO - OWNERS. THE CO - OWNERS EXECUTED THE PARTITION DEED FOR ASCERTAINING THEIR RESPECTIVE SHARE IN THE BUILT UP AREA RECEIVED. AS PER THE PARTITION DEED, T H E APPELLANT RECEIVED 1640 SQ.FEET OUT OF THE TOTAL EXTENT OF 3101 SQ.FEET IN FLAT NO. 301 IN SEC ON D FLO OR. THE REMAINING PORTION IS ALLOTTED TO HER MOTHER MRS. ENA M ARY LARIVE. FROM THE ABOVE, IT IS VERY MUCH EVIDENT THAT THE APPELLANT RECEIVED ONLY ONE FLAT JOIN T LY WITH HER MOTH ER . THE ASSESSING OFFICER IS JUSTIFIED IN GRANTING EX E MPTION U/SEC. 54F IN THE ORIGINAL ASSESSMENT. 5 . AGAINST THE ORDER OF THE LD. CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THIS TRIBUNAL . 6 . LD. D R ARGUED THAT THERE WAS REVENUE AUDIT OBJECTION WHICH WAS ACCEPTED BY THE DEPARTMENT AND BOTH THE OBJECTIONS WERE BROUGHT TO THE NOTICE OF THE LD. CIT(A) BY WAY OF REMAND REPORT . THE LD. CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE, THEREFORE ARGUED THAT THE CASE IS COVERED BY THE EXCEPTIONS , HENCE, ARGUED THAT THE APPEAL IS MAINTAINABLE AND HENCE REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND ALLOW THE APPEAL . 7 . PER CONTRA , LD.AR ARGUED THAT THERE IS NO ADDITION MADE BY THE AO IN THE IMPUGNED ASSESSMENT ORDER DATED 20/03/2014 CONSEQUENT TO REVENUE AUDIT OBJECTION, HENCE , ARGUED THAT THERE IS NO CASE FOR APPEAL BY THE AO, HENCE, REQUESTED FOR DISMISSAL OF THE REVENUES APPEAL . 5 ITA NO. 687 / VIZ /2019 C.O.NO. 11/VIZ/2020 ( SMT. MARY BERNADETTE LARIVE ) 8 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. 9 . IN THE ASSESSMENT MADE BY THE AO BY IN IT S ORDER DATED 20/03/2014 PASSED U/SEC. 143(3) R.W.S. 147 , THE AO TAKEN THE SALE CONSIDERATION AT RS. 60.00 LAKHS AS DECLARED BY THE ASSESSEE. SIMILARLY , THE AO ALSO ALLOWED DEDUCTION U/SEC. 54F OF THE ACT. NO OTH ER ADDITION WAS MADE BY THE AO PURSUANT TO THE AUDIT OBJECTION RAISED BY THE R EVENUE AUDIT PARTY . THE AO HAS ONLY BROUGHT THE INFORMATION TO THE NOTICE OF THE LD. CIT(A) AND THE LD.CIT(A) HAS CONSIDERED THE ISSUES AND HELD THAT THERE IS NO CASE FOR MAKING THE ADDITION U/SEC. 50C AS WELL AS REJECTION OF THE ASSESSEES CLAIM FOR DEDUCTION U/SEC. 54F OF THE ACT. SINCE AO HAS NOT MADE ANY ADDITION, THE CONTENTION RAISED BY THE DEPARTMENT WITH REGARD TO THE SRO VALUE AS WELL AS GRANTING OF EXEMPTION U/SEC. 54F WAS INCORRECT , SINCE , BOTH OF THEM WERE NOT BORN OUT OF IMPUGNED ASSESSMENT ORDER. THEREFORE, WE AGREE WITH THE CONTENTION OF THE LD.AR THAT THE APPEAL IS BELOW THE PRESCRIBED LIMIT OF TAX UNDER CBDT CIRCULAR NO.3/2018, DATED 11/07/2018 , AND NOT COVERED BY EXCEPTION S , HENCE, NO T MAINTAINABLE . THUS, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6 ITA NO. 687 / VIZ /2019 C.O.NO. 11/VIZ/2020 ( SMT. MARY BERNADETTE LARIVE ) C.O.NO. 11/VIZ/2020 10 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS SUPPORTING TO THE ORDER OF THE LD. CIT(A). SINCE THE DEPARTMENTS APPEAL IS DISMISSED, THE CROSS OBJECTION HAS BECOME INFRUCTUOUS AND IS DISMISSED ACCORDINGLY. 1 1 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 0 T H DAY OF FEB . , 2021 . S D / - S D / - (N.K. CHOUDHRY) (D.S. SUNDER SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 0 T H FEBRUARY , 20 2 1 . VR/ - COPY TO: 1. THE ASSESSEE - SMT. MARY BERNADETTE LARIVE, FLAT NO.501, TIRUMALA HEIGHTS, BALAJI NAGAR, SIRIPURAM, VISAKHAPATNAM. 2. THE REVENUE ITO, WARD - 3(3), VISAKHAPATNAM. 3. THE PR. CIT - 1 , VISAKHAPATNAM. 4. THE CIT(A) - 1 , VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM . 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.